Anatomy of Wine Fraud

The crime was elegant in its simplicity: create a fake 1982 Chateau Mouton Rothschild – the 100-point wine that recently sold at auction for a record price of more than £14,000 (for a case) according to the July 2010 issue of Decanter.

The perpetrator used an empty bottle of the famous wine (although it would not have been that hard to fake bottle, label, etc.) and invited several wine enthusiast friends (a.k.a. the dupes) to a social tasting where they would have an opportunity to unintentionally authenticate the DIY Mouton. (Some of the dupes unexpectedly brought along bottles of other 100-point wines from their personal cellars to share with the group. Impressive generosity! I’m sorry I called them dupes.)

The accomplice, a winemaker known for his blending skill, created the bogus vintage from an assortment of his own Washington State (!) wines from the 1990s. Some but not all of the experts took the bait — none of them suspected a fake. Wine of the night, one confidently proclaimed, even after the fraud was revealed.

The Sting

The purpose of the fraud was not, as you might expect, to make money. As reported by Lettie Teague (the perp) in the October 2008 Food & Wine article “Wine Scams: A Counterfeiter Confesses,” the idea was to see if it was possible to fool wine experts who had tasted wines like this (and even this particular wine) many times and could, presumably, easily detect a bogus wine immediately. She actually got the authentic empty Mouton bottle the hard way — by buying a full one for $1200. Not much room for illicit profit there.

Her accomplice was Chris Camarda, maker of the highly regarded Andrew Will wines. I guess it wasn’t fraud so much as a sting operation and the trap wasn’t set for Lettie’s wine expert friends (who presumably have forgiven her by now) but rather for the whole wine industry. Beware of wine fraud!

Wine Fraud: A Global Phenomenon

Old news? Hardly! My inbox has been stuffed to overflowing recently with reports of wine fraud. We seem to be Shocked! Shocked! But I wonder why? One source estimates that five percent of wines traded in the secondary market are fakes and we know that ordinary table wines aren’t always what they appear to be either. Wine fraud isn’t difficult, even at the high end. Indeed, it is remarkably simple. No wonder there is so much of it! And that’s the point of this post. Here are examples from the last few weeks.

Newly minted Master of Wine Rys Pender’s recent Master of Wine dissertation “Counterfeit wine — its impact on the business of wine takes stock of the damage so far.

Slate readers were treated to Mike Steinberger’s big article on wine fraud, including the continuing saga of “the billionaire’s vinegar.”

And then there is the “Cellared in Canada” controversy, which doesn’t seem to have gone away — a sort of “soft-core” version of wine fraud produced by rules that permit consumers to willingly mislead themselves.

Wine fraud seems to be everywhere. What are we to make of it?

New Wine in Old Bottles

Can you spot the fake?

Well, the first thing is to realize that this is nothing new. Wine fraud is as old as wine itself, or nearly so. Pliny the Elder complained about the amount of fake wine on the market. The Roman equivalent of Petrus was everywhere, even in the humblest tavern, he said. Who can you trust?

The familiar phrase “new wine in old bottles” is, of course, a description of wine fraud. Indeed, the contemporary European idea of wine is rooted in fraud – the AOC system was provoked in part by the prevalence of fake or adulterated wines.

Then as now, fraud is easily accomplished. Why are people like Lettie Teagues’s wine expert friends so easily fooled? It is partly a matter of interests (Upton Sinclair observed that it is impossible to get people to understand something if their paychecks require them to not understand it), partly human nature (we all like to be experts and hate to lose face) and partly a matter of Mother Nature — wine is a living, changing thing, everyone’s palate is a bit different, and even with high tech science (carbon dating?) it’s quite difficult to really know what’s in your glass and effectively impossible to know what might be inside an unopened bottle.

And some people want to be fooled in the sense that they want that seemingly impossible trophy (or unforgettable bargain) forgetting the rule that if something is too good to be true … it is probably false. As Walter Bagehot said, “At intervals, from causes which are not to the present purpose, the money from these people – the blind capital, as we call it, of the country – is particularly craving; it seeks for some one to devour it …”. And someone generally does, whether through credit fraud, wine fraud or something else.

Money, Greed and Wine

So what is to be done? The truth, I suspect, is that we must acknowledge that wine fraud is an unavoidable part of the wine world (just as financial crises are an apparently inevitable characteristic of financial markets). When faced with fraud in other circumstances, the first thing economists do is suggest greater transparency, but there are obvious problems with this in the case of wine. The Gallo example shows us that it is possible to create impressively realistic fake documentation while the Chinese case suggests that wine is sufficiently complex that even transparently false wines with error-filled labels will fool someone.

It would be hard to make wine more transparent in any case because some of the people with the most at stake would probably be the first to resist it. Suggestions that wine labels should include normal consumer information like you find on boxes of breakfast cereal inevitably produce a harsh reaction. Wine is above such detailed accounting (and accountability), apparently. It is as if revealing what is actually in the bottle would somehow let the genie out of it. Consumers aren’t just buying wine, they are buying mystique and lack of transparency is part of the deal. And so, I suspect, is fraud.

While I applaud efforts to punish offenders, I think we must admit that the combination of economic interests, human nature and Mother Nature will make it impossible to eliminate wine fraud. Trophy wine fakes will get all attention, no doubt, but I think that the possibility of fraud in ordinary table wine is the bigger concern — another indication of my strong Wagnerian leanings.

Chapter 4: Crisis

“At intervals, from causes which are not to the present purpose, the money from these people – the blind capital, as we call it, of the country – is particularly craving; it seeks for some one to devour it, and there is a ‘plethora’; it finds some one, and these is ‘speculation’; it is devoured, and there is ‘panic’.”

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The Wine Economist

What would you get if you crossed the Wine Spectator, America's best-selling wine magazine, with the Economist, the world's leading business weekly? The answer is this blog, The Wine Economist, which analyzes and interprets today's global wine markets. The Wine Economist was named 2015 "Best in the World" wine blog by Gourmand International. Staff: Mike Veseth (editor-in-chief) & Sue Veseth (contributing editor).